Gross profit of $2.5 million, or 31.4% of revenues, compared to gross
profit of $3.1 million, or 25.9% of revenues, in Q3 2013.

Net loss of $1.9 million, or $0.11 per diluted share, compared to a
net loss of $1.0 million, or $0.06 per diluted share, in Q3 2013.

At September 30, 2014

Total cash and equivalents of $16.0 million, or $0.90 per diluted
share.

Working capital of $17.0 million.

$0 long-term debt.

Backlog of $45.7 million, up 26.6% compared to the end of Q2 2014.

November 17, 2014 08:00 AM Eastern Standard Time

SYKESVILLE, Md.--(BUSINESS WIRE)--GSE Systems, Inc. (“GSE” or “the Company”) (NYSE MKT:GVP), a
global energy services solutions provider, today announced financial
results for the third quarter (“Q3”) ended September 30, 2014. The
Company also announced the acquisition of Hyperspring, LLC and
investment in IntelliQlik, LLC through its operating subsidiary, GSE
Power Systems, Inc.

Jim Eberle, Chief Executive Officer of GSE, said, “Our Q3 2014 results
reflected the completion of the Slovakia simulator project in April
2014, the completion of several large projects in 2013, and continuing
delays in capital expenditures by fossil fuel companies, especially with
respect to coal-fired power plants. However, we are very encouraged by
our strengthening backlog, which increased by 27% from June 30, 2014 to
$45.7 million at September 30, 2014. During Q3 2014, we generated $17.6
million of new business across a broad range of sectors and geographies,
bringing our nine-month year-to-date order total to $33.5 million. These
newly-awarded Q3 2014 projects will contribute to our results starting
in Q4 2014 and continuing through 2015. Our balance sheet remains
strong, with approximately $16 million of cash and equivalents at
quarter-end and no long-term debt. We believe that we are well
positioned for a resumption in growth, especially as industry capital
expenditure programs return to more normalized levels.”

Q3 2014 RESULTS

Q3 2014 revenue declined 34.2% to $7.8 million from $11.9 million in Q3
2013. The decrease in revenue was mainly caused by a $3.7 million
decline in revenue from the $36.6 million Slovakia simulator project,
which was completed and entered warranty in April 2014. In addition,
revenue generated from fossil fuel simulation projects decreased by $0.6
million in Q3 2014 as compared to Q3 2013, the result of the completion
of several large projects in 2013 and continued sluggishness in capital
spending by fossil fuel utilities.

Gross profit in Q3 2014 was $2.5 million, or 31.4% of revenue, as
compared to $3.1 million, or 25.9% of revenue, in Q3 2013.

Sales, general & administrative expenses in Q3 2014 rose 11.0% to $4.2
million from $3.8 million in Q3 2013. This increase was primarily due to
higher software product development expenses and severance costs related
to our U.S. operations.

Operating loss for Q3 2014 was $1.9 million compared to an operating
loss of $0.9 million in Q3 2013.

Net loss for Q3 2014 was $1.9 million, or $0.11 per basic and diluted
share, compared to a net loss of $1.0 million, or $0.06 per basic and
diluted share, in Q3 2013.

The EBITDA (Earnings before interest, taxes, depreciation and
amortization) loss for Q3 2014 was $1.7 million compared to an EBITDA
loss of $0.9 million in Q3 2013.

Backlog at September 30, 2014 rose to $45.7 million from $36.1 million
at June 30, 2014.

GSE’s cash position at September 30, 2014 was $16.0 million, excluding
$4.2 million of restricted cash, as compared to $18.1 million, excluding
$1.0 million of restricted cash, at June 30, 2014. In accordance with an
amendment to the Company’s Master Loan and Security Agreement with
Susquehanna Bank, an additional $3.1 million was placed in a restricted
cash account in September 2014 as collateral for the Company’s
outstanding letters of credit.

HYPERSPRING ACQUISITION AND INVESTMENT IN
INTELLIQLIK LLC

Hyperspring, LLC specializes in staff augmentation, training and
development, and plant operations support services, primarily in the
United States nuclear industry. In conjunction with the Hyperspring
acquisition, GSE Power also acquired a 50% interest in IntelliQlik, LLC,
which is developing a software platform for online learning and learning
management for the energy market.

Mr. Eberle commented, “These transactions will help lay the foundation
for GSE’s development into a Human and Plant Performance Improvement
Company, the next step in our evolution as a global energy services
solutions provider. Through these transactions, GSE will consolidate
powerful industry-leading educational tools into a single online
training and learning management platform that will allow us to meet a
significant unmet need for specialized workforce training in the energy
sector. IntelliQlik will combine GSE’s 3D visualization and simulation
competencies with Hyperspring’s expertise in training, staffing and
operations support, enabling us to improve workforce performance, raise
productivity and lower costs for our clients. We expect the launch of
IntelliQlik’s next-generation learning programs, including Nuclear
University, Power Systems University, Gas Turbine University and Oil and
Gas University, to occur in 2015.”

Additional details regarding this transaction can be found in a separate
press release issued by GSE on November 17, 2014.

CONFERENCE CALL

Management will host a conference call on Monday, November 17, 2014 at
9:00 am Eastern Time to discuss Q3 results and other matters.

GSE Systems, Inc. is a world leader in real-time high-fidelity
simulation, providing a wide range of simulation, training and
engineering solutions to the energy and process industries. Its
comprehensive and modular solutions help customers achieve performance
excellence in design, training and operations. GSE’s products and
services are tailored to meet specific client requirements such as
scope, budget and timeline. The Company has over four decades of
experience, more than 1,100 installations, and hundreds of customers in
over 50 countries spanning the globe. GSE Systems is headquartered in
Sykesville (Baltimore), Maryland, with offices in St. Marys, Georgia;
Cary, North Carolina; Chennai, India; Nyköping, Sweden;
Stockton-on-Tees, UK; Glasgow, UK; and Beijing, China. Information about
GSE Systems is available at www.gses.com.

FORWARD LOOKING STATEMENTS

We make statements in this press release that are considered
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934. These statements reflect our current expectations
concerning future events and results. We use words such as “expect,”
“intend,” “believe,” “may,” “will,” “should,” “could,” “anticipates,”
and similar expressions to identify forward-looking statements, but
their absence does not mean a statement is not forward-looking. These
statements are not guarantees of our future performance and are subject
to risks, uncertainties, and other important factors that could cause
our actual performance or achievements to be materially different from
those we project. For a full discussion of these risks, uncertainties,
and factors, we encourage you to read our documents on file with the
Securities and Exchange Commission, including those set forth in our
periodic reports under the forward-looking statements and risk factors
sections. We do not intend to update or revise any forward-looking
statements, whether as a result of new information, future events, or
otherwise.

GSE SYSTEMS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)

(unaudited)

Three Months ended

Nine Months ended

September 30,

September 30,

2014

2013

2014

2013

Contract revenue

$

7,823

$

11,883

$

24,823

$

35,300

Cost of revenue

5,368

8,811

17,497

26,332

Write-down of capitalized software development costs

-

-

-

2,174

Gross profit

2,455

3,072

7,326

6,794

Selling, general and administrative

4,226

3,808

12,822

11,919

Goodwill impairment loss

-

-

-

4,462

Depreciation

140

135

413

434

Amortization of definite-lived intangible assets

36

51

108

155

Operating expenses

4,402

3,994

13,343

16,970

Operating loss

(1,947

)

(922

)

(6,017

)

(10,176

)

Interest income, net

44

22

103

85

Gain (loss) on derivative instruments

69

(78

)

178

(221

)

Other expense, net

-

(49

)

(7

)

(60

)

Loss before income taxes

(1,834

)

(1,027

)

(5,743

)

(10,372

)

Provision (benefit) for income taxes

61

(32

)

162

(23

)

Net loss

$

(1,895

)

$

(995

)

$

(5,905

)

$

(10,349

)

Basic loss per common share

$

(0.11

)

$

(0.06

)

$

(0.33

)

$

(0.57

)

Diluted loss per common share

$

(0.11

)

$

(0.06

)

$

(0.33

)

$

(0.57

)

Weighted average shares outstanding - Basic

17,887,859

18,058,319

17,887,859

18,232,873

Weighted average shares outstanding - Diluted

17,887,859

18,058,319

17,887,859

18,232,873

GSE SYSTEMS, INC AND SUBSIDIARIES

Selected balance sheet data

(unaudited)

September 30, 2014

December 31, 2013

Cash and cash equivalents

$

16,028

$

15,643

Restricted cash - current

470

45

Current assets

32,519

43,944

Long-term restricted cash

3,721

1,021

Total assets

40,187

48,827

Current liabilities

$

15,490

$

17,953

Long-term liabilities

63

487

Stockholders' equity

24,634

30,387

EBITDA Reconciliation

EBITDA is not a measure of financial performance under generally
accepted accounting principles (“GAAP”). Management believes EBITDA, in
addition to operating profit, net income and other GAAP measures, is
useful to investors to evaluate the Company’s results because it
excludes certain items that are not directly related to the Company’s
core operating performance. Investors should recognize that EBITDA might
not be comparable to similarly-titled measures of other companies. This
measure should be considered in addition to, and not as a substitute for
or superior to, any measure of performance prepared in accordance with
GAAP. A reconciliation of EBITDA to the most directly comparable GAAP
measure in accordance with SEC Regulation G follows: